2016/17 Tax Thresholds and Limits released (May 2016) - SAP has released the 2016/17 PAYGW tables and Tax Thresholds and Limits via SAP Note 2319426*. SAR files are attached to the note as well as manual instructions. With the government in caretaker mode due to the federal election being called, only the HELP and SFSS PAYGW coefficients will be changing. Superannuation quarterly ceilings, Termination tax free limits for redundancies will also increase.

2016/17 Tax Thresholds and Limits update (May 2016) - SAP plan to have the 2016/17 Tax Thresholds and Limits available to customers start of business 30th May 2016. With the government in caretaker mode due to the federal election being called, only the HELP and SFSS PAYGW coefficients will be changing. Superannuation quarterly ceilings, Termination tax free limits for redundancies will also increase.

2013 Super Solution Update (May 2016) - Customers MUST have implemented the 2013 Super Legal changes prior to the end of the 2015/16 fiscal year, otherwise your payroll will error. Refer to SAP Note 2160883* and the presentation titled “Super 2013 Update (May 2016)”. Note that this solution is required for all customers.

EOY 2015/16 (April 2016) - The minimum HRSP level for the 2015/16 financial year is the November 2015 sync-point HRSP (e.g., Release 604 HRSP 93). Refer to SAP Note 2268612* for EOY information. Customers MUST have implemented the 2013 Super Legal changes prior to the end of the 2015/16 fiscal year, otherwise your payroll will error. Refer also to SAP Note 2160883* and presentation titled "Super 2013 Update” for a detailed description of the new solution.

More information regarding the HCM legal changes for China is found in SAP Note 1811538*

labour Occupational Risk Insurance Rate Adjustment for the Year 2016 (January 2016) - SAP Note 2268321* provides information about the new rate of labour Occupational Risk Insurance, which is effective as of January 1, 2016.

Employee Stock Transfer Income Tax listed on Declaration Form (January 2016) - SAP Note 2263177* enhances the report HCNCTXD0 to fulfill the legal requirement of displaying the tax for stock transfer within or outside China listed on declaration form.

Tax Exemption for Supplementary Public Housing Fund Contributions (October 2015) - According to the tax authority, if the upper limit of tax exemption for the public housing fund (PHF) contribution is greater than the PHF contribution, then the remaining portion of the upper limit is used as the tax exemption for the supplementary PHF contribution. Detailed information can be found in SAP Note 2213024*.

Core HCM capabilities in the localised version of SAP ERP for Hong Kong support local legal requirements and business best practices, and are included in the standard country version of SAP ERP.

Important Notes for Legal Changes

More information regarding HK legal change for HCM can be found at annual announcement SAP Note 1811594*

IR56B: Report Former Employees’ Stock Option Gains After Termination of Employment (February 2016) - According to the Inland Revenue Department (IRD), for the gains realised by former employees after the termination of employment, the employer should report the share option gains under item 11(j) on IR56B in the year of assessment during which it was realised. For more information, visit the HK government site.

SAP Note 2279494* enhances the Employer’s Return of Remuneration and Pensions for Tax Years (HHKCTXB0) report. You can use this program to report the stock option gains after the termination of employment. When you run the report HHKCTXB0, select the Former employee checkbox on the selection screen.

IR56B: New PDF Form Since 2015 (August 2015) - The Inland Revenue Department (IRD) released new specifications for the computerized IR56B form (Employer's Return of Remuneration and Pensions for Tax Years). SAP Note 2194609 provides a new PDF form (HR_HK_IR56B2015) for the IR56B form, which complies with the new specifications. You can use this PDF form since 2015 and it is only available in release 604 and later versions. For more details about, visit the HK government site.

IR56G: New PDF Form Since 2015 (August 2015) - The Inland Revenue Department (IRD) released new specifications for the IR56G form (Notification by an Employer of an Employee Who Is About to Depart from Hong Kong). SAP Note 2194067* provides a new PDF form for the IR56G form.

The localised version of the SAP ERP Human Capital Management (SAP ERP HCM) solution for India supports global business practices and Indian tax compliance to meet all your HR and payroll processing needs.

FVU 5.5 changesFVU 5.5 used for validating the e-file generated by the Form 24Q report has been updated as below.If there is Deduction of Interest under Income from House Property, the lender’s PAN must be provided. However, if the lender does not have a PAN, the following value should be mentioned instead in the PAN of Lender field of the e-file -- ‘GOVERNMENT’ if the lender is a government organisation, ‘NONRESDENT’ if the lender is a non-resident, and ‘OTHERVALUE’ if the lender is neither of these. Further, a value should be mentioned in Pan of Lender only if field no. 49 (Whether Interest paid to the lender under the head 'Income from house property') of the Salary details record has the value "Y". Changes have been made to address this. For more information, refer to SAP Note 2511847.

HINCALTC
Checks mapping of tax codes with allowance groupingSAP has delivered the HINCALTC report for reconciling the entries in tables V_T7INT9 and V_T7INA9. The report can be used to identify the invalid tax code wage type mappings for a particular allowance grouping. Resolving these erroneous configurations will ensure that correct exemptions are calculated in payroll for the respective allowances such as HRA, conveyance, gratuity, leave encashment and medical. For more information, see SAP Note 2426635.

Rounding issues in employer pension contribution and admin charges for EDLI and PF
The total employer contribution towards pension in case of splits in IT0587 was not matching the contribution value (8.33% of pension basis) estimated without splits. Moreover, admin charges for EDLI and PF were being rounded to the nearest rupee though not needed. These issues have now been addressed. For more information, see SAP Note 2498782.

HINCALC0: Rent benefit under Section 80GGEven if Deduction in respect of rent paid is maintained in Section 80 Deductions (IT0585) info type, the employee will be eligible for exemption for this contribution under Section 80GG only if they do not receive any HRA payment from their employer. System changes have been provided to address this. For more information, refer to SAP Note 2468398.

IT0588 modified for Form 12BB confirmation and data of previous years
Changes have been provided in IT0588 via subtype 0007 to indicate whether or not an employee has confirmed and signed their Form 12BB. It has also been made possible to maintain the info type for previous financial years as well. For more information, see SAP Note 2475489.

No deadline for claiming housing loan interest deduction u/s 80EEAs per the Income Tax Act 1961, an employee is eligible to get tax exemption on the interest paid on a home loan up to INR 50,000 under Section 80EE if certain conditions are met. According to the amendment, the exemption will be allowed in calculating the total income of the employee for the assessment year beginning on April 1, 2017 and the subsequent assessment years. This means that there is no deadline specified for claiming the exemption, and that the employee can keep on claiming the exemption every assessment year. Changes have been delivered for this. For more information, see SAP Note 2465910.

Gratuity exemption in case of death As per the Government of India Gratuity Act, the current exemption limit for gratuity is INR 10,00,000. However, for an employee who is eligible for gratuity in your organisation and is terminated due to death, the gratuity amount received by them at the time of termination should be completely exempted from the taxable income. Changes have been delivered to meet this requirement. For more information, see SAP Note 2475871.

Tax rebate u/s 87A for employees with no PANAs per the government guidelines, even if employees do not have a PAN they can still get rebate under Section 87A of the Income Tax Act, 1961. Changes have been delivered to meet this requirement. For more information, see SAP Note 2465886.

Weekly calls on Tuesday to address Payroll India queriesLast year, the Product Support Global Support Center – India for HCM started an initiative to assist customers in their everyday queries about Payroll India through weekly calls. You can join this conference call every Tuesday from 3:00 p.m. to 4:00 p.m. IST at https://launchpad.support.sap.com/#/notes/2462808

Budget 2017: Surcharge for 50 lakhs to 1 crore slab when income is above INR 1 crore. As per the Budget 2017, surcharge is applicable on the tax payable on income. However, if the income is more than INR 1 crore, surcharge on tax was getting calculated only for the income above 1 crore but not for the income from 50 lakhs to 1 crore. This has been corrected. For more information, see SAP Note 2459023.

HINCF160: Form 12BB mail log and changes in selection screen. The following options have been added to the selection screen of the Print program for form 16 (HINCF160) report:
- Displaying Form 16 Part-B and Form 12BB
- Downloading Form 16 Part-B and Form 12BB
- Sending Form 16 and Form 12BB as mail attachment to the employee
Additionally, an error log is provided upon execution of the report to identify employees to whom the Form 12BB mail attachment was not sent successfully. For more information, see SAP Note 2441088.

Budget 2017 WebinarA webinar for customers was conducted to explain the latest SAP system changes made according to Budget 2017 along with key scenarios and how this can help your organisation. For a recap, you can refer to the PowerPoint file presented in the webinar.

HINCALC0: Incorrect calculation of Deduction u/s 24After implementing the Union Budget SAP Note 2435871, when loss from house property was less than INR 2 lakhs, the system added the amount to the employee’s total income instead of subtracting it. This was incorrect and has now been rectified. For more information, see SAP Note 2451698.

Changes as per Budget 2017 proposalChanges have been delivered with regard to the following as per the Union Budget 2017 proposal:
- Rebate u/s 87A
- Surcharge on income above INR 50 lakhs
- Tax on income above INR 2.5 lakhs and up to 5 lakhs
- Deduction interest u/s 24 on house property
- Section 80CCG deduction
For more information, see SAP Note 2435871.

FVU 5.3 and 5.4 changesCertain changes have been introduced by the Government in version 5.4 of FVU, and corresponding changes have been made in the SAP system. For more information, see SAP Note 2432625.

Electronic Challan cum Return (ECR) version 2.0To reduce the complexity of the existing portal for filling the ECR, and to simplify the overloaded 25-field ECR file, EPFO has revised the existing ECR file format and portal. The new file format will have only 11 fields and be called ECR 2.0. An arrear ECR file is also provided that contains the fields relevant for arrears. For more information, see SAP Note 2416854.

Maximum bonus increased to INR 16,800The maximum bonus amount paid annually to an employee has been increased to INR 16,800. Changes have been made in the SAP system to address this. For more information, refer to SAP Note 2406147.

HINCALC0: Exemption given for both HRA (IT0581) and Deduction in respect of rent paid (IT0585)An employee should be allowed to claim exemption under HRA in infotype 0581 or under Deduction in respect of rent paid in infotype 0585, but not both. Changes have been made in the SAP system to address this. For more information, refer to SAP Note 2394881.

HINCALC0: Calculation of Senior Citizen Age as per IT Act
As per the Income Tax Act 1961, an employee will attain the prescribed age of senior or very senior citizen a day before their birthday. Changes have been made in the SAP system to address this. For more information, refer to SAP Note 2394213.

EPFO: Pension contribution till 60 years of ageThe EPFO published a gazette notification G.S.R. 440(E) dated April 25, 2016, according to which employees can provide a declaration to contribute pension till the age of 59 or 60 years instead of the default 58 years. System changes have been delivered to incorporate this. For more information, refer to SAP Note 2398163.

Salary cap of beneficiaries for ESI increased to INR 21,000
As per ESIC notification dated December 22, 2016, the government has raised salary cap of beneficiaries for ESI from INR 15,000 to INR 21,000 per month. This change is valid effective January 1, 2017. Configuration changes have been provided in the system to address this. For more information, refer to SAP Note 2410793.

Information about Form 12BB
The following additional features are introduced for Form 12BB:
1. Send Form 12BB as a mail attachment to the employee.
2. Display data even if the employee declares Section 80 and Section 80C components under Proposal.
3. Display details from the Membership Fees (IT0057) info type on Form 12BB.

For more information, refer to SAP Note 2385254.The information presented in the webinar about Form 12BB on December 6, 2016, is available - informational videos about the Form 12BB process are available on YouTube at the following links:
For Payroll administrators: https://youtu.be/n4L-ZoxlcEA
For Employee Self-Service (IT Declarations): https://youtu.be/WKvaxKo_g8o

HINCALC0: Impact of Section 89 on alternate financial year and correction run (June, 2016) - When the salary for the last payroll period of an alternate financial year was increased and a correction run was executed for it in the first payroll period of the next financial year (March), the increased amount was getting stored in /616 during a subsequent retrospective payroll run. This was incorrect and has now been rectified. For more information, refer to SAP Note 2310407*.

HINCALC0: Change in Value of TAXRO (May 2016) - With SAP Note 2267268 released in the following SPs, the value of the constant TAXRO that controls the rounding of tax wage types is set to four: 600 SAPK-600D3INSAPHRCIN, 604 SAPK-60499INSAPHRCIN, and 608 SAPK-60827INSAPHRCIN. However customers would like to define their own value or use the value 2. Hence TAXRO’s value in the system has been updated to 2. For more information, refer to SAP Note 2314048*.

FUV 5.0 Changes (May, 2016) - When validated against FUV 5.0, errors were appearing in the e-file that is generated on executing the Form 24Q report in the fourth payroll quarter. This was resulting from the changes made in FUV 5.0 by the government. System changes have been made to fix these errors. For more information, refer to SAP Note 2309011*.

Introduction of Form 12BB (May 2016) - Vide notification No. 30/2016, the CBDT has prescribed Form 12BB for the employee to furnish declarations and supporting proofs to the employer for various deductions claimed under section 192 of the Income Tax Act, 1961. This will enable the employer to estimate the employee’s income and calculate the tax on it to be deducted at source. The resulting changes needed in the declaration as well as reporting are being investigated. A comprehensive solution is expected to be delivered by the end of November 2016. For more information, refer to SAP Note 2313751*.

New Form for Kerala Professional Tax (April 2016) - A new form is introduced that needs to be submitted by the employer to the government while processing the professional tax for employees in Kerala. A legal change is provided for this new requirement. For more information, refer to SAP Note 2309040*.

Core HCM capabilities in the localised version of SAP ERP for Japan support end-to-end personnel processes. Stay up to date by subscribing to HR e-mail news from SAP Japan. You will receive news (written in Japanese) about legal changes.

More information regarding the HCM legal change for Taiwan is found SAP Note 1811593*.

Enable Function TWTRF to Recalculate Tax for Previous Periods by Pay Date (February 2016) - SAP Note 2283612* is a correction of legal function based on SAP Note 1828539*. According to this note, you delimit the Income Tax (TW) (0353) infotype with the rule Residency in Taiwan less than 183 days in the current month for a foreign employee, and the tax for previous months of the calendar year is recalculated according to the foreigner tax rule.

However, if the pay date of the payroll period is in the next month, the tax of last December should also be recalculated in the above case. Here is an example:

You delimit the infotype 0353 with the rule Residency in Taiwan less than 183 days in April for a foreign employee.

You need to recalculate the tax for previous months, including March, February, January, and Last December with foreigner tax rule.

Family Member’s NHI Calculation for Transfer in and Transfer out in One Month (January 2016) - The National Health Insurance Administration has released that, when the NHI insured transfers in and transfers out in one month, the NHI insured is eligible for NHI contribution for this month in the company. For more details, refer to the NHI site. SAP Note 2260758* addresses this legal compliance.

NHI and SNHI Premium Rate Adjusted from January 1, 2016 (January 2016) - SAP Note 2263609* provides details about the changes based on the announcement from National Health Insurance (NHI) Administration. The premium rate for NHI and supplementary NHI (SNHI) is as follows, effective on January 1, 2016 (for more information, visit the NHI site):

The premium rate for NHI is adjusted to 4.69%.

The premium rate for supplementary NHI is adjusted to 1.91%.

The lower limit of SNHI for professional practice income is adjusted to TWD 20,000.

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